Fairfield Greenwich Sued Over Madoff Losses

Dec 23 2008 | 2:28am ET

It was only a matter of time. Fairfield Greenwich Group, the New York-based hedge fund firm with the most exposure of any investor to a suspected $50 billion Ponzi scheme, has itself been sued by investors.

FFG, which had more than $7.5 billion invested with Bernard L. Madoff Investment Securities—including all $7.3 billion of its Fairfield Sentry Fund—“failed to perform even a minimum level of due diligence regarding the activities of Madoff” will reaping “millions of dollars in fees,” according to the complaint filed on Friday in New York State Supreme Court.

The lawsuit, filed by New York law firm Lovell Stewart and Halebian, seeks class-action status, as do the other two Madoff-related lawsuits that have been filed since Bernard Madoff’s arrest on securities fraud charges two weeks ago. In addition to FFG, the suit names founding partners Walter Noel, Andres Piedrahita and Jeffrey Tucker, as well as Brian Francouer and Amit Vijayvergiya of an affiliate, FG Bermuda. Vijayvergiya is also FFG’s chief risk officer. The suit alleges breach of fiduciary duty, negligence and unjust enrichment.

Plaintiff’s attorney Christopher Lovell told Bloomberg News that the suit was filed in state court, rather than in federal court, because the state court proceedings cannot be put on hold. He said he would quickly serve the respondents with subpoenas and seek a document preservation order.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...